What is a Barter deal?
- A barter deal is a situation whereby 2 parties exchange goods and/or services to each other while there is no (full) monetary compensation. The goods/services received by one party are deemed to be the consideration for the goods/services supplied by the other party.
- The ”consideration” is by definition in kind.
VAT Consequences
- From a VAT perspective, there are 2 taxable transactions. For each of the 2 transactions, the VAT consequences are to be assessed separately.
- Specfic watch-out for teh qualification of the transaction (supply of goods vs services), place of supply, VAT rate applicable to each of the transactions, deduction of VAT, liability of VAT, …
- Invoicing: This also means that both parties needs to issue an invoice for the supply of goods/services to the other party. Hence, 2 invoices are needed even if there is no monetary compensation.
- Reporting: Both transactions are to be reported in the VAT returns of the companies, either a sale or purchase of goods/services
ECJ Cases decided
- C-33/93 (Empire Stores) – Delivery, without additional payment, of article to person who registers himself or another as a new customer
- C-330/95 (Goldsmiths) – Refund VAT in case the remuneration is in kind
- C-174/00 (Kennemer Golf) – An annual subscription fees of the members of a sport association can constitute the consideration for the services
- C-37/08 (RCI Europe) – Supply of services connected with immovable property – Services consisting in facilitating the exchange by owners of rights to occupy holiday homes
- C-549/11 (Orfey Balgaria EOOD) – Liability before services are provided when all details are known and services are accurately described
- C-19/12 (Efir) – Obligation in the event of early payment of full consideration upon the establishment of the right of superficies in exchange for construction services provided
- C-283/12 (Serebryannay vek) – Barter deal: Services supplied for free in return for not paying rent
- C-410/17 (A Oy) -Barter deal – Nature and valuation of the supplies
- C‑573/18 and C‑574/18 (C GmbH & Co. KG) – Subsidy linked to price; Payments not covering full purchase price; Payments from investment fund
Interesting articles
AUSTRALIA
AZERBAIJAN
- Amendments related to VAT – Changes to ”chargeable event”
- The time of VATable non-monetary transactions such as barter, inkind transactions, as well as free-of-charge provision of goods, services and works will be considered the time when such non-monetary transactions are completed.
CYPRUS
EUROPEAN UNION
- ViDA comments, what are your thoughts?
- (Part 6) Get ready for Dec 7, 2022: Platform Economy – Types of Platforms
- Part 2 of the study on “VAT in the Digital Age” focuses on the VAT treatment of the platform economy, which involves transactions with three or more parties facilitated by online/digital platforms. These transactions involve the transfer of assets, resources, time, skills, goods, and/or services in exchange for monetary or non-monetary consideration. Platforms usually charge a fee for facilitating the transaction and link different types of users, including businesses and private individuals.
ECJ
- Roadtrip through ECJ Cases – Focus on ”Tax Point/Chargeable event & Chargeability of VAT” (Art. 62-71)
- Roadtrip through ECJ cases – What is ”Consideration” (Art. 2)
EUROPEAN UNION
INDIA
- Credit card, e-tail pacts may attract GST lens
- GST net on crypto may expand to include their sale, purchase
- GST on Constructed Property
- GST On Employees & Employee Benefits
- Taxability of Barter and Exchange under GST
- Transfer of going business vs Slump sale under GST
ITALY
- ”Free access to a website” in return of ”personal data” considered as a ”Barter deal”
- Barter between the sale of lithoid materials and the stream restoration works
- Can personal data constitute consideration?
- Facebook/Meta case: “free” social networks or Barter Deal?
PHILIPPINES
POLAND
- Cooperation with an influencer can be barter
- Tax on Revenue from Buildings; VAT Treatment of Preliminary Land Sale Contract; Social Media Barter Contract
- Taxation with VAT on the delivery of goods in exchange for an advertising service
SWITZERLAND
UNITED ARAB EMIRATES
- Are you reviewing and filing your VAT returns correctly?
- Value In Kind (Barter Exchange) – Liable for UAE VAT
UNITED KINGDOM
- Join the Linkedin Group on ECJ VAT Cases, click HERE
- VATupdate.com – Your FREE source of information on ECJ VAT Cases
